Middle East operators press ahead with projects
Even in the middle of a global pandemic, work continues within oil and gas exploration in the Middle East. We caught up with OPC’s Middle East Manager, Riley Smith, who gave us this update:
Exploration and appraisal programs pressing on
“It’s no secret that the pandemic and lower oil prices in March and April created a buyers’ market. As a result we saw a number of E&P companies pressing forward with exploration programs across the Middle East. Companies realised the remote-based working model is indeed functional and more importantly efficient. This combined with the availability of technical resources and software through cost effective service companies is resulting in E&P companies eager to get ahead on exploration programs.We also saw a high demand for our due diligence services, partly due to the new availability of distressed assets and partly due to lenders seeking reassurance on the loan facilities they have with E&P companies.
In Q1 2020 we were involved in an onshore gas exploration well test which led to a significant discovery being announced. Our client viewed the pandemic conditions as an opportunity to really fast track the development and we are continuing to support the Client as they seek to bring the asset to production by early 2021. This is just one example of how E&P companies are positioning themselves for better times ahead. Obviously conditions were more difficult for projects in the later stages of development and on production. These projects have seen retractions in April and early May, although with the oil price now over $40 per barrel there are more positive signs,
Major oil companies moving away from onshore shale and dusting off deep-water portfolios
In the wake of the global pandemic and it’s telling effect on the onshore US shale producers, we are seeing more IOC’s moving back towards deep-water assets. Many of them are dusting off their deep-water portfolios with the view that these will provide a more resilient and robust economic case compared to onshore shale. We are supporting several MENA based major E&P companies on their quest for international growth, with most of the efforts being focused on deep-water opportunities further afield. We are always looking for experienced new ventures geoscientists and engineers and encourage any looking for work currently to get in touch with OPC.
Drilling activity a bit of a mixed bag
Most operators have revised their 2020 operational plans and budgets due to the pandemic and as a result, we have seen a general reduction in drilling activity across the Middle East with plenty of rigs being released. However, there are still pockets of activity here, especially on large scale gas projects, such as the north field expansion in Qatar.
Thankfully, remote based working is nothing new for OPC as we have been delivering projects and working remotely for many years. When covid-19 hit we had the necessary technology in place already so the switch to full remote working did not disrupt OPC too much. I think in most cases we have become more efficient without the dreaded commute to the office each day. Most people I speak to internally are suggesting they are actually working longer hours now. All of our technical staff are fully set up with access to all the necessary hardware and software to allow them to continue to deliver projects to our global client base uninterrupted.
There is absolutely no doubt that the coronavirus pandemic had a significant impact on the oil & gas industry during March, April and May. However, the industry seems to have adapted very well and swiftly to the challenges the pandemic has brought. Secondly, we are seeing oil prices recover in correlation with the re-starting of the world economies. Some operators used the conditions as an opportunity to get ahead on work programs with the competitive costs of services. We have been and continue to work tirelessly to meet our client’s needs and also keeping our consultant workforce retained on current projects.